'Economy is cratering': Call for 1.5 percent official cash rate cut by Christmas
'Economy is cratering': Call for 1.5 percent official cash rate cut by Christmas
Greg Smith of Devon Funds said it was not what he thought the Reserve Bank would do, but what it should do, given the state of the economy.
From what I found reading up a bit about this a few months ago, central banks almost always overshoot when trying to trigger recessions to control inflation and in NZ its even harder as our major metrics don't update monthly like they do in other countries so there's a lag in seeing what impact interest hikes are having.
Couple that with austerity, and tax cuts to people who don't need to spend it all and the economy stagnates. I guess I assumed wrong that this was standard material covered in an English Lit degree ;)
Governments spend their way out of recessions, ours have been slashing funding and laying off thousands, which is compounding the impacts of the high interest rates.
This huge drop is a damning statement on the policy of both the RB and the coalition.
Same advisors as the austerity obsessed UK tories, so no surprise there - nor is the result much of a surprise but to the economically illiterate english literature grad.
Silver lining of the economy being rooted, I guess.